The Reserve Bank of Australia today maintained the current interest rate of 1.5 percent. This is the sixth straight month that the official cash rate has been kept steady amid an improving economy and business investment climate.
In its board meeting, RBA Governor Philip Lowe cited the above-trend growth in advanced economies. China, for example, continues its growth as proof of the higher spending on infrastructure and property construction. The global economy has also improved resulting in higher commodity prices and inflation rates. In addition, long term bond yields are up while interest rates in the U.S. are also expected to go up.
With regards to the Australian economy, Lowe in his official statement said it continues to be in a transition phase as a result of the end of the mining investment boom. Exports and investments on non-mining businesses have increased while consumer confidence is above average.
The Reserve Bank noted that the interest rates have supported these positive developments in the different sectors. Employment has seen variations across Australia with growth focused on part-time jobs.
Inflation is still low and will likely remain in the same level for some time. Headline inflation, however, is still expected to pick up to above two percent throughout 2017.
As for the housing market, conditions still vary. Some property markets are experiencing increasing prices while in other markets, prices are falling.
Rental growth, on the other hand, has been noted to be in its slowest pace for two decades. Investors, for their part, are continuously borrowing.
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